How we plan to use blockchain technology to revolutionize the music industry
Author: Nicola Ceornea, Co-Founder of DEMU
Many of you have heard of NFTs, Crypto-currencies, Tokens or similar buzzwords that can be reconducted to blockchain. Generally speaking, people have mixed feelings regarding this technology, some attributing it only to digital artwork scams or worthless memecoins and other to some kind of digital alternative to investment.
The reality is that the majority of people don’t get what blockchain is an what it does. In this post I will answer both questions and also explain how we plan to use decentralized systems to improve user experience.
A blockchain can be describes as trustless, fully decentralized peer-to-peer immutable data storage. It can be seen as an expanding record of transactions that cannot be modified. The data is spread in a network of entities referred as nodes. Once a transaction is executed, it has to be verified either by mining (proof-of-work) or validating (proof-of-stake). Basically, blockchain ensures the integrity of transactional data.
Non Fungible Token (NFT)
A NFT is a unique and distinct piece of data, which is stored in the blockchain. NFTs can represent or refer to digital files like audio, video, photos, etc. Thanks to the persistency of the data in the blockchain, a NFT can be used as a public proof of ownership.
You may have heard of them since a few e-celeb are selling goofy images as NFT for a lot of money, but in reality they can have other useful applications like permanent receipts.
Tokens and Cryptocurrencies
A cryptocurrency is a digital currency referred as coin, whose ownership is saved in the blockchain just like NFTs. A Cryptocurrency is a blockchain’s native’s currency (i.e. Ether for Ethereum), and is usually issued by the blockchain to nodes when a transaction is validated. Cryptocurrencies are used to pay “gas fees” when executing transactions on the given blockchain, but can also be exchanged for goods and services.
A Token (or Crypto Token) shares many of the same attributes as cryptocurrencies, but are a different type of digital asset. While a blockchain hosts it’s native token, nodes can also deploy other tokens on the same blockchain, which can be bought and exchanged like the native one. The major difference between the two is that tokens can represent physical assets (like real estate or art) thanks to a tokenization process (USDC and Tether are for instance backed up by fiat currency and are referred as stable coins).
Regardless of what token you are using, it’s value can follow the basic demand and supply market principle, that’s why some people buy them as an alternative to investing.
What is DEMU
In short, DEMU is a decentralized music platform. What differentiates it from other similar services like Spotify and Tidal is our creator-centric approach to music distribution.
Current music distribution services work like shop windows. You upload the music and wait until someone either buys/streams your art. If you’re lucky, you may be able to purchase some kind of “priority-lane” feature that bumps your stuff a little higher in the searches, but that’s it.
With DEMU we are trying to alleviate the two most common problems that creators have the music industry: Low to no revenue and inability to get discovered.
Our philosophy with DEMU can be summarized in two points
- Streamlining the music monetization process
- Bring the creators and listeners closer
To achieve these objectives, we offer the following features:
Upload your music for free: DEMU will never demand upload fees. We want to encourage users to post their work without fearing that doing so may have a negative impact on their finances.
Creators get paid more fairly: While platforms like Spotify pay on a per-stream basis (0.0038$ per stream as of the writing of this post), our application distributes subscription fees based on the personal streaming history. In practice this means that if you only listen to one artist, they will get the entirety of your subscription (minus a 3% maintenance fee)
Sell your music and merch directly on our Platform: Thanks to Non-Fungible Tokens (NFT), you can distribute your art directly on our platform however you choose. Want to sell a piece of music at a fixed rate? you can do that. Want to distribute it for free? you can do it. Want to let the market decide the price of your music? you can do it. On top of that, you can bind real items (like physical albums, t-shirts, etc.)to NFTs and sell and ship them as merch.
Get discovered with our discovery feature: Upcoming artists are able to choose a small clip from a song that best represents their work. Users using the discovery feature will be able to listen to the soundbites and choose if they want to hear more of your work.
Create and sell Creator Tokens: All creators can create their own Token on our platform, which can be brought or earned by the users. You can now invest in your favorite creators.
Develop Streaks and get rewarded: If you listen to a content creator regularly, you will develop a streak that is visible to everyone. Based on your engagement, you may also be awarded creator tokens. This should incentivize a loop where even if users can’t buy merch or creator-tokens, they can still support their favorite content creators by just enjoying their work while also getting something in return for it.
Current problems and roadblocks
We at DEMU want to be transparent about the current issues we are facing and the shortcomings of our system. Currently, the biggest problem we are facing is the beforementioned gas fee. When executing a transaction, a network fee (called gas fee) has to be paid. The price of said fee fluctuates heavily since it’s highly dependent on two factors: Network load and the type of executed transaction.
As of right now, deploying a small-ish sized smart contract (a piece of a computer program executed on the blockchain) can costs between 300 to 400 dollars. After that, you need to pay a fee every time you call the contract. Different calls have different prices, but for now, minting tokens and NFTs would be extremely expensive.
The people at Ethereum are working to change the validation method from proof-of-work to proof-of-stake. This change will drastically reduce gas fees to only a couple cents per transaction, but until then, some features on our platform will be prohibitively expensive for the normal person. The release of Ethereum 2.0 will be sometime around Q1 2022.
Another hurdle is that the application will ship with no music from major labels. We are currently working to bring popular music to our platform, but the process is jarringly slow and will take some back-and-forth until we can bring all the music and podcasts you love on our platform.
Become an early adopter
As a sign of good faith, we will give early adopters free DEMU-Tokens for each month of subscription. Users that have our token will receive bonuses like cheaper subscription and more.